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Cyclone Metals Ltd (ASX:CLE) has made significant progress on its Iron Bear Project in Canada, focusing on green steel production, by initiating the production of direct reduction (DR) grade pellets.
In its latest operational update, Cyclone Metals reports successful pilot plant tests, resulting in high-quality magnetic products, including DR-grade pellets with substantial yields. The company has also discovered large outcrops of haematite direct shipping ore (DSO) and magnetite during recent geological surveys, indicating considerable mineral resource potential. Additionally, 18 tons of sediment have been sent for phase 4 metallurgical testing.
Small-Scale Production Underway
Cyclone Metals CEO Paul Berend highlighted the commencement of small-scale DR pellet production. These pellets are vital for green steel production and are anticipated to be in high demand as new direct reduction steel plants emerge in the Middle East, the USA, and Canada. Berend noted ongoing positive developments in the Iron Bear mineral resource, with recent field trips revealing promising new outcrops.
Clear Operational Plan
The Iron Bear Project is guided by a robust operational plan aimed at de-risking the asset and facilitating a decision to mine within three to four years. Cyclone Metals has met all major development milestones outlined in June of the previous year. The company's upcoming objectives include producing high-quality DR pellets and securing a joint venture partner to support the project's development and substantial capital requirements.
Production of DR-Grade Pellets
Production of DR-grade pellets has begun using Iron Bear DR concentrate. Various chemical compositions are being tested to optimize metallisation and physical properties for low-carbon steel production. The phase 2 pilot plant tests, conducted on 1.8 tons of sediment, confirmed high magnetic iron recovery rates for blast furnace (BF), direct reduction (DR), and reverse flotation (RF) concentrates.
Corem, a reputable metallurgical laboratory in Quebec City, has been commissioned to manufacture and test BF and DR pellets based on Iron Bear concentrates. Four chemical compositions for DR pellets are being produced in small batches and tested for their physical and metallisation properties, with results anticipated in the next two weeks.
Field Geological Surveys
Field surveys conducted in July and August identified significant outcrops of haematite DSO and magnetite. Rock chip samples have been sent to Corem for mineralogical and sighter testing to assess the need for further exploration drilling. The company’s geologists identified numerous outcrops, some of which could be high-grade haematite deposits.
Phase 4 Core Testing
Cyclone has dispatched 18 tons of drill cores for phase 4 pilot testing, aiming to produce around 4 to 5 tonnes of BF and DR concentrate. These concentrates will be used to create bulk DR pellet samples for further testing by potential customers. Negotiations for offtake agreements with potential customers are planned to begin by the end of Q4 2024 for concentrates and Q1 2025 for pellets.
